The European Union and the United States suspend billions of dollars in import duties on each other’s products for four months. It seems that the major powers are finally coming together in a dispute over illegal state aid to aircraft manufacturers Boeing and Airbus that has been going on for some 17 years.
Washington accused European countries of secretly supporting Airbus with favourable loans. The EU, for its part, felt that Boeing was being helped by advantageous tax rules. In response to the dispute, additional trade tariffs were imposed on both sides.
In november, Brussels imposed import duties on US products worth around $ 4 billion. The US government of President Donald Trump had previously proposed tariffs for $ 7.5 billion in European products, including cheese, olives and whisky.
The suspension allows both parties to concentrate on resolving the long-term dispute. “This is an important step forward. It marks a ‘reset’ in the relationship with our largest and economically most important partner”, says EU trade commissioner Valdis Dombrovskis.
The fact that tensions with the US are finally easing has to do with the arrival of President Joe Biden to the White House. Recently, it was announced that the new US government wanted to review the policy on import duties on EU products. In addition, several European member states indicated that they hoped to re-establish ties with the US after the change of President. During Trump’s reign, tensions increased.
It is good news, especially the European luxury group Louis Vuitton Moët Hennessy (LVMH), maker of alcoholic beverages Bacardi. So for them, the suspension is good news. Airbus has already said that it welcomes the move. The group claims to be in favour of” all necessary measures to create a level playing field ” because the import duties would not benefit anyone.
Thursday, Washington also agreed with the United Kingdom on a temporary suspension of import duties. London, which has had its own trade policy since Brexit, unilaterally imposed additional tariffs on some US products in January to reduce trade tensions.